The Ministry of Textiles has asked the State Bank of Pakistan (SBP) to provide unit-wise data of non-performing loans of textile units and their current status (operating, closed, etc) to adopt a two-pronged strategy for revival of the sick units. Sources told Business Recorder here on Tuesday that there are 80 textile units in the process of closing down, for one reason or another.
The Textile Ministry has taken up the issue of revival and restructuring of the sick textile units. Sources said that those textile units which are suffering from general market slump but are otherwise technically viable would be helped through transitional support in the form of loan restructuring, interest rate subsidy, relation of prudential regulations, additional financing investment tax credit etc.
Textile units lacking technical viability would be encouraged to merge with sound units through the vehicle of Resolution Trust Corporation (RTC), whose establishment is currently in hand with the Ministry of Finance. Sources said that National Assembly standing committee on textiles in a recent meeting took the issue of sick units seriously and directed the Ministry to provide data relating to such units with the specific purpose of formulating remedial measures for their revival.
The new textile policy stipulates that a two-pronged strategy should be adopted to deal with deeper problems of non-performing loans relating to the textile sector. "The government will support the process through issuance of warrants to those acquiring the units, which will be quite valuable once the restructured units are brought on the stream by the new owners", sources added.
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